The Supreme Court bench of Justice Krishna Murari and Justice Ahsanuddin Amanullah stated that pre-condition of deposit of an amount or furnishing a bank guarantee has been the subject matter of consideration by this Court in a number of cases, where condition of pre-deposit has been held to be bad.
The Apex Court set aside the order of the Gujarat High Court on the precondition of furnishing bank guarantee for bail of committing Goods and Services Tax (GST) Offences. Further ordered to grant bail to the applicant/appellant.
The appellant was arrested on the basis of a complaint made by the Superintendent of Central Goods and Services Tax (CGST) and Central Excise for violations punishable under Sections 69 and 132(1)(a) of the Central Goods and Services Act, 2017 (CGST Act).
According to the Section 132(10)(a) of CGST Act, whoever commits, or causes to commit and retain the benefits arising out of offence of supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to five years and with fine.
Further, the appellant made an application under Section 437 of the Code of Criminal Procedure, 1973 for seeking bail before the Court of Chief Judicial Magistrate (CJM), Vadodara.
The CJM granted bail on the condition that the appellant furnishes a bank guarantee in the amount of Rs.3 crores, among additional conditions. However, disgruntled with the imposition of a condition for deposit of a bank guarantee as a pre-deposit for bail, the appellant sought the Gujarat High Court.
The Gujarat High Court reduced the requirement of furnishing a bank guarantee of Rs.3 crore to Rs.1.5 crore.
The Additional Solicitor General appeared for the State had fairly stated that such a condition cannot be imposed while granting bail.
The bench held that the order of the High Court is not liable to be sustained. However, the bench upheld the other conditions made by the CJM while granting the bail.
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